92 Energy shareholders to receive healthy premium in three-way Canadian uranium merger

Australian exploration junior 92 Energy (ASX: 92E) is set to participate in a corporate collaboration that will see three Canadian uranium explorers merge.

92 Energy’s management and major shareholders have given their approval to the deal which will initially see the company merge with ATHA Energy (TSX-V: SASK).

ATHA has also moved to acquire Latitude Uranium (CSE: LUR), eventually bringing the three firms – each with significant Canadian uranium exploration portfolios – under one roof.

Significant Athabasca exposure

With 3.4 million acres, along with a 10% carried interest portfolio of claims operated by NexGen Energy (TSX-V: NXE) and IsoEnergy (TSX-V: ISO), ATHA is the largest landholder in the uranium-rich Athabasca Basin.

92 Energy has achieved promising recent drilling success, confirming the potential of its Gemini discovery in the region.

Latitude is focused on the Angilak uranium project in Nunavut and the CMB uranium project located in Newfoundland and Labrador.

Major premium offered

92 Energy’s participation in the three-way merger is being undertaken under a scheme implementation deed with ATHA proposing to acquire 100% of the Australian company via a scheme of arrangement.

92 Energy says that if the deal goes ahead, its shareholders will receive an implied premium of 78%.

The company’s managing director Siobhan Lancaster said the merger will create a leading Canada-focused uranium exploration company with the financial and technical capacity to unlock the full value of 92 Energy’s Gemini uranium discovery.

“This merger creates substantial, rapid value for 92 Energy shareholders.”

“The deal will deliver a significant premium to 92 Energy shareholders while also giving them the opportunity to be part of the premier Canadian uranium explorer with outstanding growth potential underpinned by a significant discovery, immense exploration upside, robust funding, highly regarded management and an extensive local contact network,” Ms Lancaster said.

Additional funding plans

ATHA has announced it intends to raise approximately $25 million with the merged group eventually estimated to have around $71 million in cash available to it upon completion of the merger transactions.

Troy Boisjoli, ATHA’s chief executive officer, said the merger plans provide an incredible opportunity to create Canada’s premier uranium exploration company during a period where the world’s increasing adoption of nuclear energy is calling for new supplies of the ore.

“By combining highly complementary exploration assets from across the exploration risk curve in top-tier Canadian mining jurisdictions, we believe the combined entity will own one of the most complete portfolios of uranium assets in the entire sector and are thrilled to be able to leverage the combined team’s technical and financial resources to maximise the value of this opportunity,” he said.

Gemini a key asset

92 Energy recently confirmed earlier indications of a parallel zone of mineralisation at the Gemini uranium discovery.

Assay results identified the new parallel structure in the first follow-up to the drilling campaign that led to the September 2021 Gemini Mineralised Zone (GMZ) discovery.

New assays have now confirmed that uranium and high-grade copper mineralisation are located along a parallel zone 300m east of the GMZ.

The latest drilling program at Gemini was successful in achieving three major objectives for 92 Energy, including expanding the GMZ, testing nearby targets and prospecting for uraniferous boulders.

As well as confirming the parallel zones, the program helped expand uranium mineralisation at the GMZ to over 250m x 290m.

Elsewhere, a radioactive boulder discovered 18km southwest of the GMZ returned an assay of 0.39% triuranium octoxide, a compound of uranium.

92 Energy was particularly buoyed by that find as radioactive boulders can be used to help target the source of uranium mineralisation.

Take no action

92 Energy’s shareholders have been advised that they do not need to take any action in relation to the scheme at this stage.

A scheme booklet containing information in relation to the scheme, including the basis for the 92 Energy board’s unanimous recommendation, an independent expert’s report and details of the scheme is expected to be circulated to all shareholders in February 2024.